The growing appeal of travel hubs

Rather sadly, my local WHSmith recently closed its doors for the last time in a move that is not particularly unusual, because the company has had a tough time on the high street over recent years and is reducing its presence in such locations. Meanwhile, its travel stores are on fire. At its recent half-year results, WHSmith reported that stores located within airports and rail stations now represent more than 70% of group sales and deliver an impressive 85% of profits.

Travel hubs have been a buoyant channel for retailers and foodservice companies alike for some years, and in a post-pandemic environment, their ability to deliver reliable footfall is proving to be increasingly valuable. By contrast, the relative merits of being in city centres or suburbs seems to flip-flop, reckons Ted Schama, of Shelley Sandzer, who says the reliability of transport hubs to consistently deliver serious numbers of people to your doorstep is proving extremely attractive.

Such has been the growth of food and beverage in travel environments that even WHSmith has expanded into this domain to complement its retail offer. Carl Cowing, chief executive of WHSmith, says: “We have made excellent progress developing our food offer. By introducing new premium third-party brands such as Crussh, YO! and M&S, and by adding more chiller space in air and rail locations, we are delivering a significant uplift in this category, with food sales up 54% versus 2019.”

In an uncertain world, these numbers are fuelling an increasing clamour for exposure to travel sites. Among the operators recently announcing expanded presences in airport and rail hubs are Greggs – which has just opened a unit at Cardiff airport, which it adds to its rail station units and six other air terminal locations – as well as Puccino’s, FCB Coffee, Pret A Manger, Wagamama and Vagabond wine bars. 

The latter opened its first travel unit in Heathrow airport last year, and such has been its success that a prime site is due to open in Gatwick later this year, along with a sister unit called South Downs that will focus on English wine. Such is the confidence in this dual Gatwick gambit that Vagabond founder Stephen Finch predicts its annual turnover at the airport will hit £15m, and he has described the Heathrow opening as a “game-changer” for the business.

Not surprisingly, we are seeing various newcomers to the travel scene looking for a piece of the action. These include The Breakfast Club, which has recently partnered with travel specialist SSP to open a number of units in the UK, which will begin with the brand’s first restaurant in Gatwick airport later this year. An interesting move involves Time Out Market, which is working with Lagardére Travel Retail to develop a model suitable for airports and train stations that will seek to incorporate its “best of the city” curated food offer, which echoes its model in other locations.

This follows the signing of a deal by Boxpark for its specially created BoxHall concept within a London Transport property, covering 17,000 square feet adjacent to Liverpool Street station, which will open this summer with 16 kitchen units and two bars. This project is part of a movement that is arguably stretching the definition of the travel hub site away from it being located within the actual concourse/terminal.

This is reflected in the activity of Schama, who recently placed US burger operator Shake Shack in a smaller site than it would typically take, on Argyll Street in central London, as he sold it to the company as a transport hub site due to its close proximity to Oxford Circus underground, which drives tremendous footfall to nearby roads. 

As work-from-home patterns remain uncertain, property markets look set to face further stress and the economic backdrop remains tough, it is likely that trading patterns will continue to be unsettled for some time in many parts of the market. Against this backdrop, the certainty at travel hubs make them increasingly attractive to a growing number of food and beverage operators. 

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Retail Insider would like to thank Propel for allowing the reproduction of this column.